Nirav Modi aide Vipul Ambani was aware of fraud LoUs: CBI

ET Bureau|

Updated: Feb 22, 2018, 08.06 AM IST

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Ambani was arrested on Tuesday and is being continuously grilled by the Central Bureau of Investigation (CBI) officials in Mumbai.

Applications of fraudulent letters of undertaking (LoUs), which are at the heart of the alleged $1.8-billion scam at the Punjab National Bank (PNB), were allegedly found by the CBI on Wednesday at the office where Vipul Ambani works.

Vipul Ambani, two of his colleagues at Nirav Modi-owned companies, a PNB official and two employees of Gitanjali Gems were remanded to CBI custody until March 5 by a special court on Wednesday after their arrest a day earlier.

“His knowledge of the fraudulent transactions is proved from the fact that today (Wednesday) during the searches in this case at the office of Firestar Group of Companies at Peninsula Business Park, Lower Parel, Mumbai, the applications of fraudulent LoUs made to PNB by the three firms of Nirav Modi (Diamonds ‘R” US, Solar Exports and Stellar Diamonds) have been seized,” the CBI said in its remand application for Vipul Ambani.

This is the first high-profile arrest since the elaborate web of deception used to defraud PNB became public. On Saturday, the CBI arrested Gokulnath Shetty, a retired PNB deputy manager, one of the main perpetrators of the fraud.

According to Zulfiquar Memon, managing partner, MZM Legal: “The CBI is investigating on the violations of the Prevention of Corruption act and ED on the violations of the money laundering act, and both will be investigating the conspiracy theory…The role of the government is very crucial in identifying where the problem has been as public sentiment is involved.

Its role in trying to get hold of the principal accused in the matter will be most crucial. However, in my experience this is going to be an uphill task.”

The CBI remand application said that being the head of finance of the Nirav Modi group of companies from May 2013-November 2017 and thereafter as president (investor relations and corporate affairs), Vipul Ambani was “fully aware of the fraudulent LoUs,” which were issued by Shetty, “in conspiracy and guidance of Nirav Modi” and his employees.

Vipul Ambani, in his capacity as president (finance), also visited and met not only PNB officials at Brady House, but also those in the circle and zonal offices and in the head office at New Delhi.

CBI also said that Vipul Ambani allegedly “failed” to answer or deny when questioned as to who was preparing and maintaining the books of accounts of the three companies that caused a loss of Rs 280.7 crore to PNB in 2017.